The UK’s central bank has said it will begin consulting on plans for launching a “Britcoin” next year – but has cautioned that no such central digital currency will arrive before 2025.
The Bank of England (BoE) will work with the Treasury to judge the need for a UK Central Bank Digital Currency (CBDC), it said in a statement on Tuesday.
This consultation, to be started in 2022, will include what further work needs to be done to develop the necessary technology to support the digital money.
Earlier this year, the BoE and the Treasury established a joint taskforce to explore the potential for a digital currency issued by the UK.
The bank isn’t entirely bullish on cryptocurrencies, however.
Last month, the central bank’s deputy governor, Jon Cunliffe, said that digital currencies such as Bitcoin could trigger a financial crisis without the intervention of strict government regulations.
“This consultation will begin an open discussion on the role a UK central bank digital currency might play in the UK,” said John Glen, economic secretary to the Treasury.
“I’d encourage everyone to contribute to the discussion, so we can explore the opportunities this could bring, as well as understanding any risks it may pose.”
The consultation will evaluate the main issues at hand, consider high-level design features, possible benefits and implications for users and businesses, and considerations for further work, a statement from the BoE said.
If it concludes that there is a case for a new digital currency issued by the central bank, and that it is operationally and technologically robust, the earliest date for launch would be in the second half of the decade.
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A number of cryptocurrencies have been surging in price this week, fuelled by concerns around inflation and enthusiasm for wider mainstream adoption.
Bitcoin, the most valuable virtual currency, hit $68,564 (£50,541) on Tuesday, while ether, the second-biggest cryptocurrency by market value, earlier hit a record level of $4,842 (£3,569).
Analysts expect both to continue to climb higher in the coming weeks.
Bitcoin and ether have more than doubled since June, and added nearly 70% against the dollar since the start of October.
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